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Latin America and the Caribbean: Issues for the 110Th Congress

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Latin America and the Caribbean: Issues for the 110Th Congress Order Code RL33828 Latin America and the Caribbean: Issues for the 110th Congress Updated August 31, 2007 Mark P. Sullivan, Coordinator Specialist in Latin American Affairs Foreign Affairs, Defense, and Trade Division Colleen W. Cook, J. F. Hornbeck, Miranda Louise Jasper, Nelson Olhero, Clare M. Ribando, Connie Veillette, and M. Angeles Villarreal Foreign Affairs, Defense, and Trade Division Latin America and the Caribbean: Issues for the 110th Congress Summary Over the past two decades, the Latin America and Caribbean region has made enormous strides in terms of political and economic development. Twelve countries held successful elections for head of government in 2006, including a close election in Mexico. To date in 2007, the Bahamas held elections in May; elections are scheduled for Jamaica and Guatemala in September, Argentina in October, and are due to be called in Trinidad and Tobago by October. Although the region overall experienced an economic setback in 2002-2003, it has rebounded since 2004, most recently experiencing a growth rate over 5% in 2006. Despite this progress, several nations face considerable challenges that affect U.S. interests and policy in the region. These include persistent poverty, violent guerrilla conflicts, autocratic leaders, drug trafficking, increasing crime, and the rise of a new form of populism in several countries. In the 110th Congress, legislative and oversight attention to Latin America and the Caribbean has focused on continued counternarcotics efforts, especially in the Andean region; immigration reform (which stalled in June 2007) and increased border security, which have been key issues in relations with Mexico; efforts to deal with threats to democracy and the rise of populism in such nations as Venezuela, Bolivia, and Ecuador; debate over the best means to foster political change in Communist Cuba; trade issues, including the extension of Andean trade preferences and potential consideration of implementing legislation for free trade agreements (FTAs); and continued efforts to support stability and poverty alleviation in Haiti. Curbing the flow of illicit drugs from Mexico and South America into the United States has been a key component of U.S. relations with Latin America for almost two decades. Since 2000, the centerpiece of this policy has been the Andean Counterdrug Initiative (ACI) aimed at supporting Colombia and its neighbors in eradicating the production of illicit drugs. From FY2000-FY2007, the United States provided around $5.7 billion for the ACI. In the trade arena, the United States signed FTAs with Colombia and Peru in 2006, and with Panama in June 2007. In May 2007, the congressional leadership and the Bush Administration had reached a bipartisan deal regarding the incorporation of enforceable labor and environmental provision into pending free trade agreements. The language was subsequently incorporated into the Panama agreement and into amendments to the Peru agreement. Implementing legislation for both the Panama and Peru agreements could be introduced and considered this fall. In late June 2007, Congress approved legislation extending Andean trade preferences until February 2008. This report provides an overview of U.S. relations with Latin America and the Caribbean and focuses on the role of Congress and congressional concerns. It will be updated periodically. For further information, see the CRS products listed after each topic. Contents Overview........................................................1 Conditions in the Region........................................1 U.S. Policy...................................................3 Regional Issues ...................................................6 U.S. Foreign Assistance.........................................6 Andean Counterdrug Initiative ....................................8 U.S. Trade Policy..............................................9 Andean Trade Preferences Extension .........................10 U.S.-Peru Trade Promotion Agreement........................10 U.S.-Colombia Trade Promotion Agreement ...................11 U.S.-Panama Trade Promotion Agreement.....................12 Free Trade Area of the Americas.............................12 Migration Issues..............................................14 Terrorism Issues..............................................17 HIV/AIDS in the Caribbean and Central America....................18 Gangs in Central America......................................19 Afro-Latinos.................................................20 Trafficking in Persons in Latin America and the Caribbean............21 Country Issues ...................................................22 Bolivia.....................................................22 Brazil......................................................23 Colombia...................................................24 Cuba.......................................................26 Ecuador ....................................................28 Guatemala ..................................................29 Haiti.......................................................30 Mexico.....................................................31 Nicaragua...................................................33 Panama.....................................................34 Peru .......................................................36 Venezuela...................................................37 List of Figures Figure 1. Map of Latin America and the Caribbean .......................5 Latin America and the Caribbean: Issues for the 110th Congress Overview1 Conditions in the Region The Latin America and Caribbean region has made enormous strides over the past two decades in political development, with all countries but Cuba having regular free and fair elections for head of state. Despite this democratic progress, several nations face considerable challenges that could threaten political stability, including persistent poverty, violent guerrilla conflicts, autocratic leaders, drug trafficking, increasing crime, and the rise of radical populism. In some countries, weaknesses remain in the state’s ability to deliver public services, ensure accountability and transparency, and advance the rule of law. Twelve countries held successful elections for head of government in 2006: Chile, Costa Rica, Haiti, Peru, Colombia, Mexico, Guyana, Brazil, Ecuador, Nicaragua, Venezuela, and St. Lucia. In Mexico, the narrow official victory of conservative candidate Felipe Calderón over leftist Andrés López Obrador elicited a dramatic response from López Obrador who protested the electoral outcome. Presidents were reelected in four races — Brazil, Colombia, Guyana, and Venezuela — and in five countries, former heads of government returned to power — Costa Rica, Haiti, Nicaragua, Peru, and St. Lucia. To date in 2007, elections were held in the Bahamas in May and are expected in four additional countries: Jamaica (September 3), Guatemala (September 9), Argentina (October 28); and Trinidad and Tobago (by October). (For a listing of recent and forthcoming elections, see CRS Report 98-684, Latin America and the Caribbean: Fact Sheet on Leaders and Elections, by Mark P. Sullivan and Julissa Gomez-Granger.) In terms of economic growth, while the Latin America and Caribbean region overall experienced a gross domestic product decline of 0.6% in 2002 and only a modest growth rate of 1.5% in 2003, the region rebounded with an estimated average growth rate of 5.9% in 2004, surpassing even the most optimistic predictions. 1 This report draws from the various CRS reports listed after each topic. General sources used for this report include major newspapers covering the region, such as the Miami Herald, New York Times, and Washington Post; country reports from the Economist Intelligence Unit; articles from various daily, weekly, and monthly publications of LatinNews.com; congressional hearings and reports; and reports, press releases, and congressional budget justifications from such agencies as the State Department, the U.S. Agency for International Development, and the Office of the United States Trade Representative. CRS-2 Countries that had suffered the deepest recessions in recent years — Argentina, Uruguay, and Venezuela — all experienced significant economic growth in 2004, and even per capita income for the region as a whole increased by more than 4%. Growth continued in 2005 at a rate of 4.5%, with Argentina, the Dominican Republic, Grenada, Trinidad and Tobago and Venezuela all registering growth rates over 8%. Only Guyana experienced an economic setback of 3% in 2005. For 2006, The U.N. Economic Commission for Latin America and the Caribbean estimated a growth rate of 5.3% for the region, with Antigua and Barbuda, Argentina, the Dominican Republic, Trinidad and Tobago, and Venezuela leading the way with growth rates over 8%.2 (For information on development indicators in the region, see CRS Report RS22657, Latin America and the Caribbean: Fact Sheet on Economic and Social Indicators, by Julissa Gomez-Granger.) The Andean region still faces considerable challenges, including the rise of populism in several countries. Colombia continues to be threatened by drug trafficking organizations and by two left-wing guerrilla groups and a rightist paramilitary group, all of which, combined, have been responsible for thousands of deaths each year. The election of Bolivian indigenous leader Evo Morales as President in December 2005 complicated U.S. relations given Morales’ efforts to decriminalize
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